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RSI Alert: Pretium Resources (PVG) Now Oversold

Legendary investor Warren Buffett advises to be fearful when others are greedy, and be greedy when others are fearful. One way we can try to measure the level of fear in a given stock is through a technical analysis indicator called the Relative Strength Index, or RSI, which measures momentum on a scale of zero to 100.

Legendary investor Warren Buffett advises to be fearful when others are greedy, and be greedy when others are fearful. One way we can try to measure the level of fear in a given stock is through a technical analysis indicator called the Relative Strength Index, or RSI, which measures momentum on a scale of zero to 100. A stock is considered to be oversold if the RSI reading falls below 30.

In trading on Friday, shares of Pretium Resources Inc (TSX: PVG.TO) entered into oversold territory, hitting an RSI reading of 28.7, after changing hands as low as $6.32 per share. By comparison, the current RSI reading of the S&P/TSX Composite Index is 44.0. A bullish investor could look at PVG's 28.7 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. The chart below shows the one year performance of PVG shares:

In trading on Tuesday, shares of Top 20 Dividend (TSX: TTY-UN. O) were yielding above the 7% mark based on its monthly dividend (annualized to $0.6996), with the stock changing hands as low as $9.99 on the day.